Teva to Invest Additional $10.5 Million in CBI's Andromeda Biotech

Strategic Insights -

Teva Pharmaceutical Industries Ltd. and Clal Biotechnology Industries Ltd. announced that Teva will exercise its option to invest an additional $10.5 million in CBI's portfolio company, Andromeda Biotech Ltd., at a company value of $100 million. This investment is in addition to the $3 million Teva invested in Andromeda following the interim clinical trial report on Diapep277, a treatment for type 1 diabetes. The Phase III clinical trial is being conducted under the auspices of the European Medicines Agency (EMEA), and Andromeda has achieved good results in the trial.

Key Takeaways:

  • Teva will invest an additional $10.5 million in Andromeda Biotech Ltd. at a company value of $100 million.
  • The investment is part of a staged agreement between Teva and Andromeda, with Teva investing tens of millions of dollars in the company based on milestones.
  • Teva currently owns 3 percent of Andromeda and has the right to invest an additional $44 million in the company when Andromeda obtains marketing approval for Diapep277 in the EU.
  • The diapep277 treatment is being developed by Andromeda for the treatment of type 1 diabetes, and the Phase III clinical trial is being conducted under the auspices of the EMEA.
  • Clal Biotechnology Industries Ltd. (CBI) will report a NIS 65 million capital gain and will own 90 percent of Andromeda when the investment is completed.
  • CBI's share jumped 24 percent by mid-afternoon to NIS 4.96, and Teva rose 4 percent on Nasdaq and the TASE.

Statistics:

  • Teva will invest $10.5 million in Andromeda Biotech Ltd.
  • The Phase III clinical trial is currently underway under the auspices of the EMEA.
  • Andromeda has achieved good results in the Phase III clinical trial.
  • Teva currently owns 3 percent of Andromeda.
  • The investment is part of a staged agreement between Teva and Andromeda, with Teva investing tens of millions of dollars in the company based on milestones.
  • Teva has the right to invest an additional $44 million in Andromeda when the company obtains marketing approval for Diapep277 in the EU.

Sources:

  • "Teva to invest $10.5 million in Andromeda Biotech", Globes, Feb. 18, 2009
  • DeveloGen AG (XETRA: DE915)
  • Peptor
  • European Medicines Agency (EMEA)
  • Clal Biotechnology Industries Ltd. (TASE: CBI)
  • Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)